In the competitive world of today, the manufacturers may not be able to survive unless diversify the products. Producing new products involves further investment and accordingly, applying the options. Manufacturers make investments In strategic and devepmental projects, or replace equipments. Scarcity of resources and rare opportunities entail applying technical appraisals and making rational decisions. In this paper different types of investment as well as capital budgeting arc explained. Finally we have considered cost - benefit analysis in determining the projects. Financial and economic dimensions are not neglegted.